97/26/EC: Commission Decision of 24 April 1996 declaring a concentration to be incompatible with the common market and the functioning of the EEA Agreement (Case No IV/M.619 - Gencor/Lonrho) (Text with EEA relevance) (Only the English text is authentic)

• Articles: 3

Article 1

The concentration by way of Gencor Limited and Lonrho plc acquiring joint control of the whole of Implats and LPD as notified by Gencor Limited and Lonrho plc is hereby declared incompatible with the common market and the functioning of the EEA Agreement.

Article 2

This Decision is addressed to:

1. Gencor Limited

6 Hollard Street

Johannesburg 2001

PO Box 61820

Marshalltown 2107

Republic of South Africa

2. Lonrho plc

4 Grosvenor Place

UK-London SW1X 7DL.

Done at Brussels, 24 April 1996.

For the Commission

Karel VAN MIERT

Member of the Commission

(1) OJ No L 395, 30. 12. 1989, p. 1 (corrected version OJ No L 257, 21. 9. 1990, p. 13).

(2) OJ No C 13, 14. 1. 1997.

(3) This means that if the price, for example, increases by 10 % then quantity demanded will decrease by less than 10 %. The total sales revenue therefore increases in this situation, despite a decrease in quantity sold.

(4) European minerals yearbook, 1995.

(5) South African reserves of palladium are by some sources estimated to be about double the Russian reserves of palladium (Vermaak, 1995).

(6) Except for the Northam mine in which AAC and Rembrandt have shares. However, the future of this mine is uncertain due to its lack of profitability.

(7*) Blanks between square brackets indicate business secrets deleted in the published version of this Decision.

(8) Less than 40 %.

(9) Less than 25 %.

(10) Less than 20 %.

(11) Less than 25 %.

(12) Less than 15 %.

(13) Indeed, the implication would be the conclusion that even a hypothetical company controlling all South African and Russian production, thus having a market share of 90 %, would not be in a dominant position.

(14) Less than 10 %.

(15) Less than 15 %.

(16) Less than 50 %.

(17) Less than 40 %.

(18) Less than 40 %.

(19) Less than 25 %.

(20) Less than 5 %.

(21) Less than 10 %.

(22) Less than 15 %.

(23) Less than 25 %.

(24) Less than 25 %.

(25) Less than 5 %.

(26) Less than 15 %.

Schedules & Appendices

ANNEX I

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ANNEX II

EXPLANATORY NOTE TO GRAPHS

The graphs set out in Annex II represent the before and after merger operating cost curves of the three South African platinum producers as prepared by the parties to the operation. Operating costs include mining and processing costs and are largely fixed in nature.

These graphs have been prepared based on the total operating costs of each of the producers' mines (expressed as rand per ounce platinum equivalent) for 1994 and the quantity produced (in thousands of ounces) by each mine.

Therefore, each step in the cost curve indicates the incremental production and associated operating costs of each additional mine.

The graphs show the current asymmetry in the operating cost structures between LPD, Implats and Amplats and the symmetrical post-merger cost structure between Implats/LPD and Amplats.

GRAPH II A BEFORE MERGER (OPERATING COSTS OF SHAFTS)

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GRAPH II B POST MERGER (OPERATING COSTS OF SHAFTS)

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ANNEX III

Figure 2.1 Costs, supply and demand in a natural resources industry

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ANNEX IV

Figure 3.1 Platinum industry cost curve for South African producers (first six months financial year 1995)

[business secret]

ANNEX V

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ANNEX VI

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ANNEX VII

PLATINUM PRICES - VARIOUS CURRENCIES

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